Balancing Profitability and Sustainability

Climate change is a topic at the forefront of everyone’s mind, with articles and images popping up regularly that showcase melting ice caps and animal deaths as a direct result of climate change. Everyone, from the smallest individual to the CEO of the largest corporation, has started taking steps to lessen their environmental impact.

With large companies, though, it can be hard to find the balance between environmental-mindedness and profit. What struggles do environmentally-concerned business managers face on a daily basis? How do you balance being green and making a profit?

The curse of fossil fuels

Fossil fuels are used every single day in every corner of the globe. The world consumes about 92 million barrels of oil per day and millions of tons of coal. This unchecked consumption releases hundreds of thousands of tons of harmful pollutants into the air every single year.

Where would we be, though, without the electricity produced by coal-burning power plants and the product-transportation network of trucks, ships and planes?

This is one of the biggest challenges that business managers face when trying to reduce their carbon footprint and make their company more environmentally friendly.

However, there are steps that companies can take to reduce their use of fossil fuels. Companies with large transport fleets can transition to biodiesel engines for large trucks and solar or electric vehicles for smaller individual cars. Solar- or wind-powered office buildings can help to reduce a company’s use of coal-burning power plants.

While these steps can help to reduce a company’s carbon footprint, it doesn’t make good business sense if it costs more to be environmentally friendly than the company is bringing in at the end of the year. That’s where balance comes in.

CEOs need to be more concerned

While there are plenty of companies will good intentions when it comes to improving the environmental impact of their businesses, there are not enough CEOs who think climate change is an actual threat to their businesses yet.

According to a recent poll of business owners and CEOs, most are more concerned with over-regulation, geopolitical uncertainty and the possibility of cyber attacks than they are with climate change or the damage their business could be doing to the environment.

Right now, roughly 50 percent of company owners consider climate change as an active threat. Half of a global market, while substantial, is not enough to really facilitate the changes that need to be made to improve the environmental impact of the business and industrial sectors.

Balancing profitability and sustainability

The trick, and the one thing that is going to set companies apart moving forward, is the ability balance sustainability and profitability. Setting up a solar-powered factory is a great move toward sustainability, but it does you little good if you leave yourself without the ability to buy the equipment or supplies needed to keep your company moving forward.

With that in mind, though, it is important not to discourage anyone from taking risks or trying something new. You never know what amazing innovations will come from someone willing to take a risk and what that can do to help improve your industry as a whole.

For example, in 2008, a beverage-bottling company called Florida Ice & Farm took steps to reduce the amount of water it took to prepare a liter of any given beverage. When the company started, it took a whopping 12 liters of water to prepare 1 liter of drinkable beverage, including the water used to clean and sterilize the bottles. By the time it had finished, the company reduced that water usage from 12 liters to 4.9 liters. Pepsi, standing on the shoulders of giants, was able to further reduce the water usage to an astonishing 2.2 liters per 1 liter of beverage.

That innovation, first pioneered by someone at Florida Ice & Farm, has effectively changed the entire bottling industry. This step toward sustainability is the perfect example of balancing environmental concerns and profitability.

There are many steps we can still take to improve the sustainability of our businesses without negatively impacting their profitability. Finding the delicate balance between the two will depend on each individual business and the amazing and innovative minds behind them.